Rivals Apple, Google, Samsung reportedly team up to buy Kodak patents

But Kodak wanted a bit more than what the coalition is offering.

Occasional bitter rivals Apple, Google, and Samsung are reportedly teaming up to acquire a range of digital imaging patents from Kodak's bankruptcy fire sale, according to the Wall Street Journal. Apple and Google in particular had recently been making competitive bids for the patents, but the two companies decided to work together, along with Samsung, HTC, LG, and others, to keep the price from ballooning beyond about half a billion dollars.

The beleaguered Kodak entered bankruptcy earlier this year, planning to liquidate much of its patent portfolio in order to pay off creditors and emerge as a leaner operation. However, the company had hoped to get over $2 billion for the portfolio of digital imaging patents that Apple and other smartphone manufacturers are interested in.

It seems that neither Apple nor Google feel the patents are worth that price. According to sources speaking to the WSJ, the companies decided to create a coalition to buy the patents as part of a pool. Apple had used the same strategy last year when it teamed up with Microsoft and RIM to buy up 3G and 4G related technology patents from the defunct Nortel.

While Apple is currently embroiled in a high-profile patent lawsuit with Samsung, and by proxy Google, it seems the parties can work together on patents in some cases. The interest here seems to be mutual benefit, as Kodak has aimed its digital imaging patents in lawsuits against Apple, RIM, HTC, Samsung, and other smartphone makers.

Is it possible to withdraw or expire your own patent earlier than the original expiration date? It might be a strange question, but since pretty much every big player has their fingers in this coalition is it really worth keeping them around? Who could possibly infringe them that isn't already in the coalition?

It takes common sense ideaS and make it impossible to use them with out paying a bully (patent troll). Some of the patent arguments I have read is retarded. All patents seem to do today is the opposite of what they were intended to do. It makes it impossible for a startup to get moving. Essentially destroying my desire to innovate.

I'm curious how the 'Us vs. Them' battlelines are going to be drawn up in this comment thread.

Yup. For a current example, republicans and environmentalists are currently teaming up against mainstream democrats in an attempt to drain one of San Francisco's major reservoirs, demolish the dam, and convert the valley into a park using the catchphrase "second Yosemite valley" to promote the idea. About the only way this could get weirder would be if someone like the NRA started advocating to keep the reservoir.

Any one would think this kind of conspiracy would be illegal. But I don't see how it is.

I guess other investors could come in and outbid this group and then sue the bunch of them if they thought the patents had more value.

I'm pretty sure the DoJ/FTC could make a heck of a case that this is running afoul of anti-trust provisions. If it can be shown that the value of the patents is X and a coalition of most of the players in any bidding war is going to end up buying them for X/4, then there's collusion.

Even if the DoJ/FTC don't get involved, the bankruptcy administrators or judge may still say no to any deal if they strongly suspect that Kodak's creditors can get more money out of the deal.

Google and Samsung being involved means that Apple can't use those patents against Android or against Samsung (and vice versa).

Microsoft, Apple and Rim teamed-up to purchase the Nortel patents, so they can't use those against each other.

So Google could go after everyone with Mot's patents (or use then defensively), Rim or Microsoft could use the Nortel patents against Google or Samsung (or HTC).

Of course Apple and Microsoft also have a warchest of patents so they could already probably sue anyone over a hell of a lot of technology.

The big advantage in grabbing the Kodak patents is so that a patent troll (i.e.: someone who doesn't make anything so you can't counter-sue) doesn't get them... but they're pretty pricey patents for even a sizeable patent troll.

Very simple explanation for them to work together:1) Most of the patents are bad patents, obvious implementations, and otherwise devoid of merit.2) The price needs to be high enough to keep the trolls out of the running.3) None of the interested parties cares to have the patents except defensively.4) None of the interested parties really wants to pay for these patents, so they might as well each pay a portion and not have to deal with it again.

Was that such a difficult analysis to glean from the available facts?

I doubt the FTC will be interested in any anti-trust because ultimately forming a consortium of this type will reduce rather than expand their workload. The interested parties will all go to the FTC and flat out tell them they're paying 10x what they think the patents actual worth is just to keep it out of FTC hearings and the US court system.

I also doubt the patents will be used as some are suggesting to steamroll startups out of the business. Each company involved already has a more than sufficient patent portfolio to do that if they care to. There are usually 4 ways for a startup to go. A) They have something great and get bought out for a nice heap of cash and leave happy. B) They have nice demos, but no substance and the industry weeds them out. C) They have something great but they lack the business management / negotiation skills to break into the industry and get steamrolled, partially through their own faults. D) They have something great and make it on their own into the industry.

Google and Samsung being involved means that Apple can't use those patents against Android or against Samsung (and vice versa).

Microsoft, Apple and Rim teamed-up to purchase the Nortel patents, so they can't use those against each other.

So Google could go after everyone with Mot's patents (or use then defensively), Rim or Microsoft could use the Nortel patents against Google or Samsung (or HTC).

Of course Apple and Microsoft also have a warchest of patents so they could already probably sue anyone over a hell of a lot of technology.

The big advantage in grabbing the Kodak patents is so that a patent troll (i.e.: someone who doesn't make anything so you can't counter-sue) doesn't get them... but they're pretty pricey patents for even a sizeable patent troll.

I'm curious how the 'Us vs. Them' battlelines are going to be drawn up in this comment thread.

Yup. For a current example, republicans and environmentalists are currently teaming up against mainstream democrats in an attempt to drain one of San Francisco's major reservoirs, demolish the dam, and convert the valley into a park using the catchphrase "second Yosemite valley" to promote the idea. About the only way this could get weirder would be if someone like the NRA started advocating to keep the reservoir.

I don't hate software patents like most on these boards, but I believe there should be a rule that says patents purchased from other companies can only be used for defensive purposes.

If you filed the patent, you can take on others with it. If you just bought the patent, you can only use it to protect yourself.

That's really not all that different from hating them. It would have an interesting effect on the industry when companies talk about merging, for example.

The government should just limit active software patents in a particular industry to some arbitrary number. Then the government has to go back and review them for which ones are most innovative and invalidate the rest. I know it's a pipedream, but I just can't help imagining the CEOs of the large software companies sweating about that one late at night.Maybe the USPTO would be a bit better about reviewing the patents before they were granted in such a situation though.

It takes common sense ideaS and make it impossible to use them with out paying a bully (patent troll). Some of the patent arguments I have read is retarded. All patents seem to do today is the opposite of what they were intended to do. It makes it impossible for a startup to get moving. Essentially destroying my desire to innovate.

I don't think here that you hate patents, but rather the abuse of patents in a more general sense. Patents themselves (at least in some areas) I believe are needed, as it truly does provide incentives for companies to do research and innovate. However, handing out patents for things such as genes or broad software ideas (such as on both sides of the Apple vs Samsung trial) is where things start heading more towards what you are talking about. Smaller companies find themselves destroyed not by the market, but by competitor's law teams.

I think there exists a world where patents would help it, to find it though patents need to be brought into the 21st century.

All I see is that Kodaks assumption on offering these patents so that that individual companies go into a feeding frenzy over them to batter the losers with has backfired. And I see that as a good thing. It shows to me, that the individual companies don't really have the stomach for yet more patent litigation.

Perhaps the CEO's are wising up that no-one wins other than the lawyers in these wars. And hopefully the mobile sector will see common sense and realise that they need to boot out the parasitic lawyers as soon as possible, as they are draining the market of it's profits.

Any one would think this kind of conspiracy would be illegal. But I don't see how it is.

I guess other investors could come in and outbid this group and then sue the bunch of them if they thought the patents had more value.

I'm pretty sure the DoJ/FTC could make a heck of a case that this is running afoul of anti-trust provisions. If it can be shown that the value of the patents is X and a coalition of most of the players in any bidding war is going to end up buying them for X/4, then there's collusion.

Even if the DoJ/FTC don't get involved, the bankruptcy administrators or judge may still say no to any deal if they strongly suspect that Kodak's creditors can get more money out of the deal.

The DoJ looked into the Nortel buy; all that the coalition had to do is to promise to license the patents related to any standard to all comers (i.e. a sort of, but not exactly, FRAND pact). I'm sure a related agreement could easily be made here. The fact that Apple is teaming up with Google and Samsung is a clear indicator that none of the patents are likely to give them a competitive advantage and are probably viewed as more of a defensive acquisition.

So what happened Microsoft here? They were supposed to be bidding with Apple on this. I hope these guys get these patents, as ex Microsoftie Myvold (or however his name is spelled) and his patent troll company are bidding against them.

I don't hate software patents like most on these boards, but I believe there should be a rule that says patents purchased from other companies can only be used for defensive purposes.

If you filed the patent, you can take on others with it. If you just bought the patent, you can only use it to protect yourself.

That wouldn't be a bad idea, but I still believe that any patent (including software patents) should remain valid only if the holder has actual products that use the patents. If not, after few years, the patents should become public property.

I'd say Jobs would support this idea. Remember, the only 'stolen product' is Android, and they only 'stole' from Apple, so if Android is taken down by anything else, it would deny Apple justice. Everything else is just infringement.